FX Daily Dose – December 26, 2013
December 26, 2013 in FX Daily Dose
“Forex Daily Dose” presents a quick snapshot of the price-action of EUR/AUD, EUR/GBP, USD/INR, USD/CAD, EUR/USD, GBP/USD, USD/JPY and AUD/JPY for the immediate and medium-term outlook. Please note that the daily outlook is for current pairs in focus and we may add or remove some of the currency pairs accordingly.
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USD/JPY jumped up sharply with the opening of Monday morning session. The pair went over the previous high of 103.63 to touch 104.84 before losing the momentum. The hourly candles are clearly reflecting an uncertainty and confusion because of the evident bullish sentiments against the fear of overcoming the psychological resistance of the 105.00 level. However, the break over 104.63 clearly indicates that we should be able to see the break of 105.00 barrier soon. As we have been mentioning in the previous update that a break over 105.00 should target 105.60 next. On the downside the first support is expected to hold at or over 104.57. Any failure of that support will be the first indication for a delay in targeting 105.00 but even in such case a strong support should come at 104.36. Any failure of 104.36 may bring some more consolidation before a recovery. Even with a break of 105.00, a drop in the upward momentum will be expected over 105.00. This is not just for today but even a sustained price action over 105.00 should bring a consolidation towards 102.00 or lower before hitting 107.40.
EUR/USD has been in a sideways range since December 19th after failing to sustain over 1.3811. The price-action had broken the support of the short-term trend-line but has been staying over the 55-day EMA support. Further downward consolidation cannot be ignored but as long as the prices stay over the recent 1.3625, we stay neutral. Any decisive break below 1.3625 will also represent the failure of the 55-day EMA support. Even with such a move another immediate support will be expected near 1.3615. However, any break below 1.3615 will turn the focus downwards for 1.3543 or more. On the upside the first level of resistance should hold in the range of 1.3717 to 1.3723. Any failure of this resistance will be the first indication that the consolidation might be over and another test of 1.3800 should be in the pipe-line.
USD/CAD’s fall after touching 1.0737 had broken the expected support of 1.0620 but the pair had found a strong support at 1.0581 i.e. well over the previous support level of 1.0561. We remain neutral till the price action is below 1.0653 but the overall outlook stays bullish. If the immediate resistance at 1.0653 fails the a retest of 1.0737 will be expected and with any break over 1.0744 to 1.0750 resistance zone we would expect USD/CAD to target 1.0854 of the week of May 24, 2010. Before the pair had touched 1.0854 during May 2010, an extremely strong resistance had continued to be in the range of 1.0744 to 1.0750. The recent resistance was felt just 7 pips below this range and that indicates that this resistance may prove to be critical. On the downside the first support is expected at 1.0606 and any failure of that will be the first indication that the pair may go for some consolidation but a better indication will only come if the support at 1.0561 fails.
CAD/JPY rose again after finding support at 98.01 but there has been some loss of momentum with a resistance at 98.51. Further gains towards the resistance of 99.02 of the week of May 27, 2013 are now expected, however we will stay cautious because of the approaching strong psychological resistance level of 100.00. Even if CAD/JPY breaks above 99.02, a strong resistance will be expected at 99.38. This level had proved to be a minor support during May 2013 and now we expect it to turn into a resistance. The psychological pressure of 100.00 will also make this level critical. On the downside the support will be expected to hold at 98.01 but a failure of that will start neutralizing the bullish outlook for the short-term..
GBP/USD has fallen into a sideways range but overall bullish outlook remains intact. The pair had jumped strongly form the expected support zone as we had indicated earlier at “GBP/USD enters the zone of strong supports“. If the minor resistance of 1.6394 fails then a retest of 1.6484 and then a test of 1.6500 is expected. And break above 1.6500 should continue the gains towards 1.6545 to 1.6555 resistance zone. However if the immediate resistance holds then any break below 1.6316 will indicate a breakout of the channel on the downside and such a move my bring some consolidation towards 1.6250 i.e. towards 55-day EMA support. We wills stay positive as long as the support at 1.6217 remains in place.
EUR/GBP had failed to sustain over the resistance of 84.63 even after a slight breach of that resistance when it had touched 84.66. The slight recovery after the strong fall has found a resistance at the 55-day EMA. Even though the downward move is lacking any good momentum, we expect the fall to extend if the support at 0.8330 fails. However we are staying neutral till the price is over 0.8330. A failure of this support may find another support at 0.8274 but if that support also fails then deeper declines first for a retest of 82.52 and more will be expected. As we had mentioned in the previous update also, on the upside a break above 0.8414 is required to indicate any possibilities for further gains.
EUR/AUD had fallen strongly after meeting the target mentioned by us during the last to last update. The fall from 1.5579 had extended to 1.5287 before a recovery to 1.5408. We remain in favor of further recovery towards 1.5477 first and then 1.5500 or beyond. However we will stay neutral till the price action is below 1.5411/1.5420 resistance.
USD/INR remains in sideways mode between 61.31 and 62.44. We remain neutral initially and our outlook stays same as we have been mentioning earlier i.e. “Any break below 61.33/61.30 will be the first indication of topping. Overall we remain in the favor of further drop in the near-term and the only thing which is sustaining USD/JPY from further downward consolidation is the psychological support of 60.00. On the upside the first resistance is expected below 62.00 but overall only a break above 62.40 to 62.50 resistance will indicate the possibilities that a short-term bottom is in place.”.
You may also check the daily and weekly analysis for 8 currency pairs on the following pages:
- EUR/USD daily analysis
- USD/JPY daily analysis
- GBP/USD daily analysis
- USD/CHF daily analysis
- AUD/USD daily analysis
- EUR/JPY daily analysis
- GBP/JPY daily analysis
- AUD/JPY daily analysis